A sudden turn in the Turkish market for longs at end May-early June has attracted not only local, but also foreign players. Prices for construction steel have jumped by $50-63/t in a few steps over the week due to a surge in buying activity on lower supply and shortage of certain rebar sizes in some regions of the country. At the same time, new deals for scrap at somewhat higher prices (just by $10/t up over the month) indicating substantial growth of mills’ margin, has also had a certain impact. Besides, as the parliamentary elections will be held soon, traders are willing to replenish depleted stocks before that time, because it is hard so far to forecast what policy the ruling party will follow after the win.
However, market players doubt that the upward trend will persist for a long time, since in fact it is almost unjustified and foreign customers who purchase more than a half of the entire construction steel output in Turkey are unready to make bookings.
So, earlier this week a number of producers announced their intentions to lift offers to $783-805/t (TRY 1,470-1,510/t) EXW. In particular, mills from the Marmara Sea region, including Icdas, have been among the first to push offers up and thus already the highest prices in the country have reached new highs. On May 27, Kardemir started offering rebar at $792/t (TRY 1,486/t) EXW against $761/t (TRY 1,436/t) EXW. The supplier has taken such a move probably willing to protect its customers, who bought the material earlier, and to show that the situation will remain favourable for producers in the near future. Notably, Kardemir managed to sell somewhat more than 20,000 t of rebar previously.
Steadily strong demand is still can be observed in the wire rod segment as after final customers resumed buying in late May, traders have followed them. At the same time, Isdemir (Iskenderun) whose prices were among the highest ones in the past two months, has slowed down. The producer has probably followed such policy to sell more material ahead of scheduled repairs in the second half of June. However, it is still unable to fully cover demand from buyers, thus the latter source the material from suppliers in other regions too.
Although some customers are highly interested in square billet, most Turkish suppliers are in no hurry to close deals and prefer to focus on sales of finished longs due to more attractive prices for them. At present, the difference between quotations of semis and rebar is about $80/t against $40-45/t in May. As a result, only re-rollers exporting finished longs have a way out, as they are able to buy billet from the CIS at $690-695/t C&F without import duty.
( Source: www.metalexpert-group.com )